The Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight Tuesday issued an advisory reminding market participants that any claimed bona fide hedge exemption from speculative position limits under the Dodd-Frank reform act would be subject to a special call in connection with the claimed exemption.
Specifically, the Commission may use its special call authorities — if it has questions about a transaction — to request market participants to provide information related, but not limited, to:
The division said it issued the advisory at this time because there will be new traders and new commodities subject to position limits (and the related exemption reporting requirements) under the Commission’s new speculative position limit rules, which were issued last October (see Daily GPI, Oct. 19, 2011); and the division believes that it is important to highlight and clarify the process and record-keeping requirements associated with claiming a hedge exemption from the Commission’s position limit rules.
The CFTC’s rule on speculative position limits, which has yet to be implemented, establishes limits on speculative positions in 28 core physical commodity contracts, four of which are energy contracts: Nymex Henry Hub Natural Gas, Nymex Light Sweet Crude Oil, Nymex New York Harbor Gasoline Blendstock and Nymex New York Harbor Heating Oil.
The advisory said these special call authorities remain an active tool for use by the Commission and the division and directs market participants to comply in a timely manner with any such request for information.
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